Summary: There was fault by the Council. It failed to get an independent valuation of Mrs Y’s interest in a property as part of a financial assessment for her care home costs. This was a failure to act in line with Annex B of Care and Support and Statutory Guidance. The Council will apologise, make Mrs Y’s representatives a symbolic payment and arrange an independent valuation with the Valuation Office Agency.

The complaint

1. Mr and Mrs X complained for their mother Mrs Y that Shropshire Council (the Council) failed to value Mrs Y’s interest in a property in line with charging rules.
2. They said this caused them avoidable distress and time and trouble and Mrs Y a potential financial loss.

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The Ombudsman’s role and powers

3. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

5. I considered the complaint to us, the Council’s response to the complaint and documents described later in this statement. I discussed the complaint with Mr and Mrs X. Mr X set out a detailed report setting out his complaint to us and sent us all the correspondence and documents he gave the Council and all the correspondence and emails he received from it. I refer to only the key documents and have summarised these in the next section.
6. Mr and Mrs X and the Council had an opportunity to comment on two draft decisions. I considered any comments received before making a final decision.

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What I found

Relevant law and guidance

7. Councils charge people for residential care. People who have assets above £23,350, including the value of a property are not entitled to council funding and arrange and pay for their own care. We expect councils to have regard to Care and Support Statutory Guidance (CSSG) when carrying out financial assessments to determine whether a person is eligible for council funding. Annex B of CSSG says:
• Where ownership is disputed, a council should seek written evidence to prove ownership (paragraph 11).
• Valuation of an asset is the current market value minus 10% if there are expenses involved in selling it (paragraph 14).
• If the person and the council agree the value of the asset is over £23,250, then there is no need to get an exact valuation. If there are disputes, a precise valuation should be obtained (paragraph 16).
• Where a precise valuation is required, a professional valuer should provide a current market valuation (paragraph 17).
• Councils should try to obtain an independent valuation of the person's share within 12 weeks. The aim should be to resolve this as quickly as possible…..to enable the council to work out the charge and for the person to consider whether to seek a deferred payment agreement (paragraph 18).

(A deferred payment agreement is where the council loans the person part of the care fees up to the value of their share in the property and the loan is repaid when the property is sold.)

What happened

8. Mrs Y lives in a care home. Mr and Mrs X are her attorneys and manage her finances. Mr and Mrs X arranged and paid for Mrs Y’s care from her savings. Mrs Y’s savings were about £23,350 in September 2020 and Mr and Mrs X sought funding from the Council.
9. Mrs X and Mrs Y owned a house originally as joint tenants. In 2008, they signed a notice of severance. Meaning since 2008, they own the property as tenants in common in equal shares. (‘Tenants in common’ means each owner has a distinct share in the property and can have unequal shares. It means the property does not automatically pass to the surviving owner as it would in the case of a joint tenancy, but passes according to the deceased person’s will)
10. To apply for funding, Mrs X completed the Council’s financial declaration form in September 2020. She stated she and Mrs Y owned a property and gave details of Mrs Y’s savings and income.
11. The Council’s finance team wrote to Mrs X at the start of October acknowledging receipt of the form and saying an officer would be in touch about funding assistance. The letter went on to say:
• based on the information on the form, Mrs Y jointly owned a property and this would be taken into account. The Council said she could complete an application for a deferred payment agreement (DPA).
• If the Council funded the placement and there was no DPA authorised, it would issue invoices at the full cost of care.
• Once funding had been agreed, the Council would write again and would arrange for invoices to be sent every four weeks.
12. The finance team wrote again in November asking Mrs X to complete a Form PRV1. It said once Mrs X had completed and returned the form, the Council would arrange for the Valuation Office Agency (VOA) to complete an independent specialist valuation of the value of Mrs Y’s share of the property. Mrs X completed and returned the form. I note the start of the form said ‘to enable Shropshire Council to obtain an independent specialist valuation of the beneficial interest… the completed form will be passed to an independent property valuation service. You will, where requested be given an copy of the valuation request. The independent valuation service will be asked to provide a valuation of your property interest in line with the charging for residential care regulations set down by the government. We will inform you of the outcome….’ Mrs X put on the form that she and Mrs Y were tenants in common with a 50% share each. And she (Mrs X) had paid for improvements to the property. She said she did not want to buy Mrs Y’s share or to sell the property as she may want to move back there if her husband died.
13. An officer from the finance team emailed Mrs X at the start of December to say he had not sought an independent valuation because he had enough information. The email went on to say:
• He had valued Mrs Y’s share at £46,000 by comparison with two other similar properties advertised for sale on a national website
• He presumed the split was 50/50 and subtracted 10% as the property was not owned with a spouse and a further 10% for the cost of sale.
• He referred to one particular legal case as authority. That case said an empty property is treated as marketable and the value treated as equally split between owners.
14. Mr X replied saying he disputed the Council’s valuation and he’d had a professional valuation of Mrs Y’s interest as far less (£1000). He attached a copy of the valuation.
15. The finance team wrote to Mrs X at the end of January 2021 following the email saying Mrs Y was above the funding limit, saying it had paid the care home’s fees for three weeks in October and would be raising an invoice for them to pay the full cost. The letter continued ‘should Shropshire Council fund any further periods of care, the full cost would apply until Mrs Y’s capital falls below the funding limit of £23,250.’
16. Mr X emailed the finance team to say he disputed the Council’s valuation. He asked the Council to follow its published procedure and get an independent valuation.
17. Mr X complained to the Council at the start of February 2021. He set out the background to his complaint and asked the Council to arrange an independent valuation. The finance team responded in March saying as he had already provided his valuation, there was no need for the Council to obtain one. The letter went on to deal with Mr X’s ‘appeal’ saying:
• The property was not registered with the Land Registry nor was there any documents in support of the alleged division of shares
• The Council assessed Mrs Y to have a 100% beneficial interest in the property
• Case law supported the Council’s position as the property was not occupied
• If the deeds contained a declaration regarding the interests held, then the Council would look at Mrs Y’s share being 50% if that was what was stated in the document. On the basis of information available, the Council assumed Mrs Y had full ownership.
18. Mr X complained again to the Council saying it was being unfair and had not followed procedures. He said if the Council had needed any evidence, it should have asked him for it. He said he had already told the Council that he was in the process of registering the property with the Land Registry, there was a long delay in this and he had retained copies of documents sent to the Land Registry in case and enclosed those documents. The letter went on to explain why the legal case the Council had relied on was not similar to the facts of Mrs Y’s case. Mr X asked the Council to appoint a professional valuer. The Council responded initially saying it had reviewed the correspondence and the decision in its previous letter stood.
19. Mr X complained again in May, pointing out the Council’s previous correspondence indicated it was treated Mrs X and Mrs Y as joint tenants and not tenants in common without asking him for evidence, but he had provided unregistered title deeds and the notice of severance (see paragraph nine). He said the Council was plainly wrong to treat Mrs Y as having a 100% share.
20. The Council replied in May apologising for conflicting information. It said:
• Its first valuation was based on Mr X’s valuer’s report which said the property was jointly owned
• The legal team then reviewed the decision and advised Mrs Y’s interest was 100% as there was no evidence as to the division of the property
• There was a miscommunication as the writer was not aware that Mr X had sent in information about the conveyance under separate cover
• The legal department reviewed the case again and agreed Mrs Y’s share was 50%. Her share was just under £46,000 which included a 10% discount for sale cost and a 10% discount for severance of tenants in common
• Mrs Y was not eligible for local authority funding, but she would be eligible for a DPA if the property was registered with the Land Registry
• The Council would ensure in future that valuations were peer reviewed and checked by the legal team.
21. Commenting on a first draft of this statement, the Council told me:
• It initially dealt with the value of Mrs Y’s interest based on the evidence provided at the time. It was only by making further enquiries that additional information was provided and the Council was able to revise its initial view
• Mr X indicated in a phone call in November 2020 that he wanted to rent out the property and did not want to be ‘trapped’ by completing a PRV1. The finance officer responded to him by email. (summarised in paragraph 13)
• Mr and Mrs X’s valuation report appeared to have misinterpreted case law
• If Mr and Mrs X had provided all the information from the outset, then the Council would have been in a position to deal with the matter sooner.

Findings

22. It is not our role to value Mrs Y’s share/interest, that is for the Council to do, but we expect it to have regard to CSSG because CSSG is statutory guidance.
23. The Council is at fault. Annex B of CSSG says councils need to get an independent valuation if there is a dispute about the value of a person’s interest (share) in a property. This is the case here. It is also the Council’s own procedure as set out in the information it sends to the public.
24. It made no sense for the finance team to say that because Mr X had already obtained a valuation, it did not need to. The finance team did their own valuation, but this was not an independent one and it was vastly higher than Mr X’s so it was obvious Mr X would be disputing it. So, Annex B clearly said the Council needed to get an independent valuation.
25. The injustice is an uncertainty about when Mrs Y’s capital falls to the funding threshold and a potential loss of council financial support depending on the outcome of the independent valuation.
26. I also consider the Council’s correspondence was contradictory and confusing and this is a further fault. Having initially settled on a 50% share, it went on to suggest Mrs Y had a 100% share before reverting to its original position. This caused avoidable confusion, uncertainty, distress and time and trouble for Mr and Mrs X in following up correspondence to try and get clarity about the Council’s position and to try and get the Council to follow the proper procedure.
27. The Council’s position is Mr and Mrs X did not provide all the necessary information at the outset and so contributed to the fault and injustice I have identified. If this was the case and the Council needed more evidence, it should have asked for all the information it felt necessary before making a decision about Mrs Y’s interest. There is no evidence indicating Mr and Mrs X were trying to withhold information or otherwise not being co-operative.

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Agreed action

28. The Council will instruct the VOA to prepare an independent valuation of Mrs Y’s interest in the property. The valuation needs to be of Mrs Y’s interest as of September 2020 when Mr and Mrs X first applied for council funding.
29. The Council will share with Mr and Mrs X the information it intends to provide to the VOA in advance and enable them to provide further relevant information if they wish. It is unclear from the publicly available information how long the VOA currently takes to prepare valuations so the valuation may take longer than a month. The Council will ask the VOA to complete the valuation as soon as possible.
30. Once the Council has the independent valuation, it will work out the date when Mrs Y’s capital will be/was £23,250 and calculate whether she is owed a refund or not.
31. The Council will apologise to Mr X and Mrs X for the fault described in this statement and make them a symbolic payment of £250 to reflect their avoidable distress and time and trouble complaining.
32. The Council will apologise, make the payment and instruct the VOA within one month of my final decision. I cannot say at the time of writing how long the valuation will take, but once it is available, the Council will take the action I have recommended in paragraph 30 within one month.

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Final decision

33. There was fault by the Council. It failed to get an independent valuation of the interest in a property as part of a financial assessment for Mrs Y’s care home costs. This was a failure to act in line with Annex B of Care and Support and Statutory Guidance. The Council will apologise, make Mrs Y’s representatives a symbolic payment and arrange an independent valuation with the Valuation Office Agency.
34. I have completed the investigation

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Investigator's decision on behalf of the Ombudsman